Lives endangered by fake medicines and goods

Letter to the Editor published in the Financial Times, 6 May 2005. From Ms Maria Livanos Cattaui.

Sir, There is much to agree with in Guy de Jonquières’ article on intellectual property theft. As he notes, so far the war against imitators, counterfeiters, criminal syndicates and corrupt officials has not had a lot of success. His analysis of the market for pirated goods is spot on. It is disappointing then that Mr de Jonqui è res seems to take a panglossian view of the problem: nothing much can be done about it, so let’s hope it will come out all right in the end.

This is not the view of people who have suffered from taking fake medicines, which may have few, or none, of the ingredients that make them work. Counterfeiting can kill when a fake part for a car or aircraft fails. The scope of counterfeiting has increased dramatically in recent years, both geographically and in the variety of goods that are faked. Organized crime syndicates and terrorists are now funding their operations with the proceeds of this ever-lucrative business. As international enforcement officials explain, “counterfeiting and piracy are more profitable than narcotics but without the risks”.

Knowledge-based industries are the keystone of the economic strategies of many countries at different stages of economic development. Developed countries need them in their battle to create jobs; developing economies need them to move up the value chain. Intellectual property theft stifles innovation and deters honest local entrepreneurs from investing in product and market development, especially in knowledge-based industries. The most affected victims of intellectual property theft are often small local entrepreneurs, successful enough to be copied, but who do not have the resources or know-how to defend themselves.

Foreign producers of reputable products are reluctant to manufacture in countries where intellectual property theft is rife. Such countries lose out on outsourcing, and consequential employment opportunities, as well as on foreign direct investment and transfer of know-how and technology.

We at the International Chamber of Commerce recently launched an initiative called Business Action to Stop Counterfeiting and Piracy Worldwide, or BASCAP. By uniting companies from all sectors worldwide to fight the crooks we believe we can bring pressure on governments to act more purposefully to use their powers to protect and encourage legitimate commerce. We are not prepared to give in.